<PAGE>   1
                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10Q


(X)      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
         THE SECURITIES EXCHANGE ACT OF 1934

         For the quarterly period ended September 30, 2000

(  )     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
         OF THE SECURITIES EXCHANGE ACT OF 1934

         For the transition period from ________ to _________

                         Commission File Number 000-31517



                        INRANGE TECHNOLOGIES CORPORATION
             (Exact Name of Registrant as Specified in its Charter)


             Delaware                               06-0962862
     (State of Incorporation)           (I.R.S. Employer Identification No.)


                 13000 Midlantic Drive, Mount Laurel, NJ 08054
             (Address of principal executive offices and zip code)

                                 (856) 234-7900
              (Registrant's telephone number, including area code)


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.


                                Yes ____    No X

<PAGE>   2
            Common shares outstanding November 9, 2000- 84,488,333




                        INRANGE TECHNOLOGIES CORPORATION
                               INDEX TO FORM 10-Q



<TABLE>
<CAPTION>
                                                                                                                             PAGE
                                                                                                                            NUMBER
<S>                      <C>                                                                                                  <C>
PART I                   FINANCIAL INFORMATION

Item 1.                  Unaudited Consolidated Financial Statements                                                           3

                         Unaudited Consolidated Balance Sheets at September 30, 2000 and December 31, 1999                     3

                         Unaudited Consolidated Statements of Operations for the Three and Nine Months Ended September
                         30, 2000 and 1999                                                                                     4

                         Unaudited Consolidated  Statements of Cash Flows for the Nine Months Ended September 30, 2000
                         and 1999                                                                                              5

                         Notes to Unaudited Consolidated Financial Statements                                                  6

Item 2.                  Management's Discussion and Analysis of Financial Condition and Results of  Operations                13

Item 3.                  Quantitative and Qualitative Disclosures About Market Risk                                            20

PART II                  OTHER INFORMATION

Item 1.                  Legal Proceedings                                                                                     21

Item 2.                  Changes in Securities and Use of Proceeds                                                             21

Item 5.                  Other Information                                                                                     23

                         SIGNATURES                                                                                            25

</TABLE>


                                       2
<PAGE>   3
PART I. FINANCIAL INFORMATION
ITEM 1. UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

                        INRANGE TECHNOLOGIES CORPORATION

                     UNAUDITED CONSOLIDATED BALANCE SHEETS
                (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

<TABLE>
<CAPTION>

                                                             SEPTEMBER 30,   DECEMBER  31,
                                                                 2000            1999
                                                             -----------     -------------
<S>                                                          <C>             <C>
ASSETS
CURRENT ASSETS:
  Cash and equivalents...................................     $  20,104       $   1,023
  Demand note from SPX...................................        57,526              --
  Accounts receivable, net...............................        72,522          51,037
  Inventories............................................        32,097          27,624
  Prepaid expenses and other.............................         4,306           1,314
  Deferred income taxes..................................         4,650           4,650
                                                              ---------       ---------
          Total current assets...........................       191,205          85,648
PROPERTY, PLANT AND EQUIPMENT, net.......................        15,673          10,117
PROPERTY HELD FOR SALE...................................         4,243           4,256
DEFERRED INCOME TAXES....................................           501              --
GOODWILL AND OTHER INTANGIBLES, net......................        44,292           7,710
OTHER ASSETS, net........................................        35,435          24,619
                                                              ---------       ---------
          Total assets...................................     $ 291,349       $ 132,350
                                                              =========       =========

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
  Short-term borrowings and current portion of
   long-term debt........................................     $   7,457       $   4,111
  Accounts payable.......................................        27,133          20,458
  Accrued expenses.......................................        21,188          15,363
  Deferred revenue.......................................         7,736          10,401
                                                              ---------       ---------
          Total current liabilities......................        63,514          50,333
                                                              ---------       ---------
LONG-TERM DEBT...........................................         1,252              20
                                                              ---------       ---------
DEFERRED INCOME TAXES....................................            --           3,499
                                                              ---------       ---------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
  Preferred stock, $0.01 par value, 20,000,000
   shares authorized and none issued and outstanding.....            --              --
  Class A common stock, $0.01 par value, 150,000,000
   shares authorized, 75,633,333 shares issued
   and outstanding.......................................           756             756
  Class B common stock, $0.01 par value, 250,000,000
   shares authorized, 8,855,000 shares issued and
   outstanding at September 30, 2000.....................            89              --
  Additional paid-in capital.............................       137,339          (5,335)
  Retained earnings......................................        87,777          82,426
  Net equity of Consolidated units.......................            --             730
  Accumulated other comprehensive income (loss)..........           622             (79)
                                                              ---------       ---------
          Total stockholders' equity.....................       226,583          78,498
                                                              ---------       ---------
          Total liabilities and stockholders' equity.....     $ 291,349       $ 132,350
                                                              =========       =========
</TABLE>



        The accompanying notes are an integral part of these statements.


                                       3
<PAGE>   4
                        INRANGE TECHNOLOGIES CORPORATION

                UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)


<TABLE>
<CAPTION>

                                                       THREE MONTHS ENDED             NINE MONTHS ENDED
                                                         SEPTEMBER  30,                 SEPTEMBER  30,
                                                   --------------------------     --------------------------
                                                       2000          1999             2000          1999
                                                   ------------  ------------     -----------   ------------
<S>                                                <C>           <C>              <C>           <C>
REVENUE:
  Product revenue...............................   $    53,925   $    41,705      $   135,288    $   127,136
  Service revenue...............................        10,170         8,517           27,235         25,469
                                                   -----------   -----------      -----------    -----------
          Total revenue.........................        64,095        50,222          162,523        152,605
                                                   -----------   -----------      -----------    -----------
COST OF REVENUE:
  Cost of product revenue.......................        24,973        17,146           64,103         60,496
  Cost of service revenue.......................         6,800         4,733           18,133         15,647
                                                   -----------   -----------      -----------    -----------
          Total cost of  revenue................        31,773        21,879           82,236         76,143
                                                   -----------   -----------      -----------    -----------
  Gross margin..................................        32,322        28,343           80,287         76,462
                                                   -----------   -----------      -----------    -----------
OPERATING EXPENSES:
  Research, development and
     engineering................................         5,807         3,818           15,867         14,436
  Selling, general and
     administrative.............................        16,147        10,606           40,681         34,836
  Amortization of goodwill and other............           747           267            1,281            801
     intangibles...............................
  Special charges...............................            --            --             (190)         9,687
  Write-off of acquired in-process
     technology.................................        10,000            --           10,000             --
  Gain on sale of real estate...................            --        (2,829)              --         (2,829)
                                                   -----------   -----------      -----------    -----------
     Operating expenses.........................        32,701        11,862           67,639         56,931
                                                   -----------   -----------      -----------    -----------
OPERATING INCOME (LOSS).........................          (379)       16,481           12,648         19,531
INTEREST EXPENSE................................           830           213            1,146            710
OTHER (INCOME) EXPENSE..........................           143        (6,156)              32        (13,913)
                                                   -----------   -----------      -----------    -----------
     Income (loss) before income taxes..........        (1,352)       22,424           11,470         32,734
INCOME TAXES PROVISION (BENEFIT)................          (541)        9,177            4,588         13,405
                                                   -----------   -----------      -----------    -----------
NET INCOME (LOSS)...............................   $      (811)  $    13,247      $     6,882    $    19,329
                                                   ===========   ===========      ===========    ===========
EARNINGS PER SHARE:
 Basic..........................................   $     (0.01)  $      0.18      $      0.09    $      0.26
                                                   ===========   ===========      ===========    ===========
 Diluted........................................   $     (0.01)  $      0.18      $      0.09    $      0.26
                                                   ===========   ===========      ===========    ===========
 Shares used in computing  basic
   earnings per share...........................        76,018        75,633           75,763         75,633
                                                   ===========   ===========      ===========    ===========
 Shares used in computing  diluted
   earnings per  share..........................        76,018        75,633           75,928         75,633
                                                   ===========   ===========      ===========    ===========
</TABLE>


        The accompanying notes are an integral part of these statements.



                                       4

<PAGE>   5
                        INRANGE TECHNOLOGIES CORPORATION

                UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)


<TABLE>
<CAPTION>
                                                                         NINE MONTHS ENDED
                                                                           SEPTEMBER 30,
                                                                       --------------------
                                                                         2000        1999
                                                                       -------    ---------
<S>                                                                    <C>        <C>
CASH FLOW FROM OPERATING ACTIVITIES:
  Net income.......................................................    $ 6,882    $  19,329
  Adjustments to reconcile net income to net cash provided by
    (used in) operating activities:
    Depreciation...................................................      4,321        4,381
    Amortization of goodwill and other intangibles ................      1,281          801
    Amortization of other assets...................................      4,503        2,776
    Accretion of debt on seller notes..............................         58           --
    Stock option charge............................................        250           --
    Special charges................................................       (190)       9,687
    Deferred income taxes..........................................     (4,000)      (1,252)
    Write-off of acquired in-process
    technology.....................................................     10,000           --
    Gain on sale of real estate....................................         --       (2,829)
    Gain on sale of investment.....................................         --      (13,914)
  Changes in operating assets and liabilities:
    Accounts receivable............................................    (15,520)      (6,711)
    Inventories....................................................     (1,450)      (3,699)
    Prepaid expenses and other current assets......................     (2,859)         119
    Accounts payable...............................................      5,082        2,936
    Accrued expenses...............................................      6,612       (2,028)
    Deferred revenue...............................................     (2,724)      (1,873)
    Payments of special charges and
    disposition related accruals...................................       (832)     (11,256)
                                                                       -------    ---------
         Net cash provided by (used in)
         operating activities......................................     11,414       (3,533)
                                                                       -------    ----------
CASH FLOW FROM INVESTING ACTIVITIES:
  Purchases of property, plant and
    equipment, net.................................................     (3,090)      (2,001)
  Cash paid for business acquired, net of cash acquired............    (54,803)          --
  Proceeds from sale of real estate................................         --        6,358
  Net proceeds from sale of investment.............................         --       14,735
  Capitalized software costs.......................................     (4,748)      (3,737)
  Increase in demonstration equipment and other assets.............     (7,571)      (2,289)
  Payment for product rights.......................................         --       (3,000)
  Purchase of investment...........................................     (3,000)          --
                                                                      ---------  ----------
      Net cash provided by (used in)
      investing activities.........................................    (73,212)      10,066
                                                                       -------    ---------
CASH FLOW FROM FINANCING ACTIVITIES:
  Net payments under lines of  credit..............................     (2,484)        (700)
  Net proceeds from initial public offering........................    128,200           --
  Payments on long-term debt.......................................        (64)      (1,551)
  Loan made to SPX.................................................    (57,526)          --
  Proceeds from (payments to) SPX..................................     12,052       (4,488)
                                                                       -------    ----------
      Net cash provided by (used in)
      financing activities.........................................     80,178       (6,739)
                                                                       -------    ----------
EFFECT OF FOREIGN CURRENCY TRANSLATION.............................        701          258
                                                                       -------    ---------
NET INCREASE  IN CASH AND EQUIVALENTS..............................     19,081           52
CASH AND EQUIVALENTS AT BEGINNING OF
PERIOD.............................................................      1,023        2,461
                                                                       -------    ---------
CASH AND EQUIVALENTS AT END OF PERIOD..............................    $20,104    $   2,513
                                                                       =======    =========
</TABLE>


        The accompanying notes are an integral part of these statements.




                                       5


<PAGE>   6
                        INRANGE TECHNOLOGIES CORPORATION

              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
            (AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

1. BASIS OF PRESENTATION:

    Inrange Technologies Corporation (the "Company" or "Inrange") designs,
manufactures, markets and services networking and switching solutions for
storage, data and telecommunications networks. The solutions are targeted for
use in large-scale systems that are critical to a business' operations to
provide fast and reliable connections among networks of computers and related
devices for large scale enterprise applications.

    The consolidated financial statements include the assets, liabilities,
revenue and expenses of Inrange which is a majority-owned subsidiary of SPX
Corporation ("SPX"), and the assets, liabilities, revenue and expenses of
certain other units comprising the storage networking, data communications and
telecommunications networking business of SPX, and exclude two of the
subsidiaries of Inrange not involved in the business (Consolidated, the
Company). The net assets of the other Consolidated units were transferred to the
Company in June 1999 (Tautron) and June 2000 (division of General Signal
Limited). The net assets of the two excluded subsidiaries were transferred out
of the Company in June 1999 and May 2000, as such, the accompanying financial
statements are now presented on a consolidated basis.

    The Consolidated financial statements have been prepared on the historical
cost basis and present the Company's financial position, results of operations
and cash flows as derived from SPX's historical financial statements. SPX
provides certain services to the Company including general management and
administrative services for employee benefit programs, insurance, legal,
treasury and tax compliance. Such amounts are charged to the statement of
operations.

    The financial information included herein does not necessarily reflect what
the financial position and results of operations of the Company would have been
had it operated as a stand-alone entity during the periods covered, and may not
be indicative of future operations or financial position.

    In September 2000, the Company completed an initial public offering of
8,855,000 shares of Class B Common stock at $16.00 per share and received net
proceeds of $128,200. The proceeds were used to repay borrowings from SPX to
fund certain acquisitions in the second and third quarters of 2000. The
remaining proceeds will be used for general corporate purposes. However, pending
use of the proceeds, the Company has invested $15,000 in a money market account
and the remaining net proceeds have been loaned to SPX under a demand note
(Note 4).

    In the opinion of management, the accompanying balance sheets and related
interim statements of operations and cash flows include adjustments
(consisting only of normal and recurring items) necessary for the fair
presentation in conformity with generally accepted accounting principles.
Preparing financial statements requires management to make estimates and
assumptions that affect the reported amounts of assets, liabilities, revenues,
and expenses. Actual results could differ from these estimates. Interim results
are not necessarily indicative of results for a full year. These financial
statements should be read in conjunction with the Consolidated financial
statements and notes thereto included in the Company's Form S-1 Registration
Statement as filed with the SEC.

2. SIGNIFICANT ACCOUNTING POLICIES:


Cash and Equivalents

    SPX uses a centralized cash management system for all of its domestic
operations, including those of the Company. The net amount of daily cash
transactions is transferred to SPX and was credited to additional paid-in
capital (Note 8) through the date the Company closed on its initial public
offering. Subsequent to the initial public offering, such amounts are
included as part of the demand note due from SPX (Note 4).

    The Company considers highly liquid investments with an original
maturity of 90 days or less to be cash equivalents. Cash





                                       6
<PAGE>   7
equivalents consist principally of cash deposited in money market accounts.

Revenue Recognition

    The Company recognizes revenue upon shipment of products with standard
configurations. Revenue from products with other than standard configurations is
recognized upon customer acceptance or when all of the terms of the sales
agreement have been fulfilled. The Company accrues for warranty costs, sales
returns, and other allowances at the time of shipment based on its experience.
Revenue from service obligations is derived primarily from maintenance contracts
and is deferred and recognized on a straight-line basis over the terms of the
contracts. Other service revenue is recognized when the service is provided.

    The Company sells its products and services to a large number of customers
in various industries and geographical areas. The Company's trade accounts
receivable are exposed to credit risk, however, the risk is limited due to the
general diversity of the customer base. The Company performs ongoing credit
evaluations of its customers' financial condition and maintains reserves for
potential bad debt losses. No single customer in the three or nine month periods
represented greater than 10% of total revenue.



3.   ACQUISITIONS:

     On June 30, 2000, the Company acquired two distributor businesses (TCS and
STI) for an aggregate purchase price of approximately $6,400. The Company paid
$4,100 at closing and an additional $1,600 and $700, respectively, are payable
after the first and second years from the closing of the acquisitions based upon
the achievement of certain sales targets. Upon the achievement of such targets,
the payments will be made and additional goodwill will be recorded.

     In August 2000, the Company completed the acquisitions of Varcom
Corporation ("Varcom") and Computerm Corporation ("Computerm"). Varcom is
located in Fairfax, Virginia and provides network management hardware, software,
and services. Computerm is located in Pittsburgh, Pennsylvania and offers high
performance channel extension products and services that allow storage
networking applications to operate over wide area networks. The purchase price
of Varcom was $25,000, which includes a non-interest bearing seller note of
$1,500 due August 2002. The purchase price of Computerm was $30,000, which
includes a non-interest bearing seller note of $3,000 due August 2001. The
Computerm acquisition agreement contains a net asset target of $10,661 as of the
closing date of the acquisition. A liability of $2,990 has been recorded in
purchase accounting for the preliminary estimate of the excess of the net assets
received versus the target. This estimated liability will be revised and settled
in the fourth quarter of 2000 based on an audit of the net assets.

     All acquisitions were recorded using the purchase method of accounting. The
notes due to the sellers have been discounted at an imputed interest rate of
10%. A summary of the preliminary allocation of purchase price to the net assets
acquired is as follows:



                                       COMPUTERM       VARCOM     TCS/ STI
                                       ----------    ----------   ----------
Purchase price--
  Cash paid for acquisition.........     $ 27,184      $ 23,559     $  4,100
  Due to seller (at discounted value)       5,706         1,229          133
                                       ----------    ----------   ----------
                                         $ 32,890      $ 24,788     $  4,233
                                       ==========    ==========   ==========
Purchase price allocation--
  Net assets acquired...............     $ 13,651      $    120     $    281
  Purchased in process technology...           --        10,000           --
  Goodwill and other intangibles....       19,239        14,668        3,952
                                       ----------    ----------   ----------
                                         $ 32,890      $ 24,788     $  4,233
                                       ==========    ==========   ==========


         The allocation of the purchase price to identifiable intangible assets,
acquired in-process technology and goodwill has been determined by management
based on an analysis of factors such as historical operating results, discounts
of cash flow projections and specific evaluations of products, customers and
other information.



                                       7
<PAGE>   8
         As of the acquisition date, Varcom had in-process technology projects
that had not reached technological feasibility and did not have any alternative
future uses. A value of $10,000 has been assigned to these in-process technology
projects. In accordance with SFAS No. 2, "Accounting for Research and
Development Costs," as clarified by FASB Interpretation No. 4, amounts assigned
to acquired in-process technology meeting the above criteria have been charged
to expense as part of the allocation of the purchase price of the business
combination. This value excludes the efforts to be expended on the development
projects, and solely reflects progress made as of the acquisition date. The
in-process technology projects are for the development of two new products.
Based on an assessment of factors including time spent on the project compared
to total expected project time and expenses incurred to date compared to total
project expenses, management estimates that the projects were 77% and 48%
complete, respectively. The total cost incurred for these projects was
approximately $4,000 as of the acquisition date. Total expected costs to
complete these projects are approximately $1,500.

         The other identified intangibles recorded in purchase accounting are
being amortized using lives of five to 12 years and goodwill is being amortized
using lives of 10 to 20 years.

4. TRANSACTIONS WITH SPX:

    There are no material intercompany purchase or sale transactions between SPX
and the Company. SPX incurs costs for various matters for Inrange and other
subsidiaries including administration of common employee benefit programs,
insurance, legal, accounting and other items that are attributable to the
subsidiaries' operations. These costs are allocated based on estimated time
incurred to provide the services to each subsidiary. The Consolidated financial
statements reflect allocated charges from SPX for these services of $75 and $64
for the nine months ended September 30, 2000 and 1999, respectively. Management
of SPX and the Company believe that the allocated costs are reasonable and
reflect the effort involved in providing the services and also represent what
the costs would have been on a stand-alone basis. In addition, direct costs
incurred by SPX on behalf of the Company are charged to the Company. The direct
costs were $1,749 and $1,505 for the three months and $4,692 and $4,474 for the
nine months ended September 30, 2000 and 1999, respectively.

    Advances and other intercompany accounts between the Company and SPX
through the date the Company completed its initial public offering have been
recorded as a component of additional paid in capital in the accompanying
balance sheet with the exception of the notes issued in connection with certain
acquisitions (Note 3). These notes and accrued interest thereon were repaid upon
completion of the initial public offering. Advances and other intercompany
charges after such date are recorded as a component of the demand note due from
SPX. As of September 30, 2000, the demand note from SPX was $57,526. The demand
note bears interest at the average rate of the SPX credit facilities and is
recorded on a monthly basis as interest income. The accompanying statements of
operations for the three and nine months ended September 30, 2000 contain
interest expense of $777 relating to the acquisition borrowings from SPX and
interest income of $55 relating to interest income from the demand note from
SPX.


5. INVENTORIES:



                                        SEPTEMBER 30,   DECEMBER 31,
                                        -------------   ------------
                                            2000            1999
                                        -------------   ------------

            Raw materials...............  $14,305         $14,175
            Work-in-process.............    3,712           4,646
            Finished goods..............   14,080           8,803
                                          -------         -------
              Net inventories...........  $32,097         $27,624
                                          =======         =======





                                       8
<PAGE>   9
6.  OTHER ASSETS:

                                              SEPTEMBER 30,  DECEMBER 31,
                                                  2000           1999
                                              -------------  ------------

            Capitalized software.............   $15,283        $11,466
            Demonstration equipment..........    16,830         10,665
            Product rights...................     9,216          9,249
            Investment.......................     3,250            250
            Other............................       699            556
                                                -------        -------
                      Total other assets.....    45,278         32,186
            Accumulated amortization--
            Capitalized software.............    (4,188)        (3,021)
            Demonstration equipment..........    (5,023)        (3,442)
            Product rights...................      (632)        (1,104)
                                                -------        -------
              Net other assets...............   $35,435        $24,619
                                                =======        =======

    The Company capitalized $4,748 and $3,737 in the nine months ended September
30, 2000 and 1999, respectively, of software development costs. Amortization
expense was $2,096 and $1,551 in the nine months ended September 30, 2000 and
1999, respectively. The Company capitalized $1,773 and $885 in the three months
ended September 30, 2000 and 1999, respectively, of software development costs.
Amortization expense was $757 and $451 in the three months ended September 30,
2000 and 1999, respectively.

    Demonstration equipment represents equipment at customer locations for
demonstration purposes and is amortized on a straight-line basis over a period
not to exceed three years.

    Product rights represent technology licenses and pre-paid royalties for
three product lines. Amortization of the technology licenses commences upon
general availability of the products and continues through the term of the
license, not to exceed five years.

    In March 2000, the Company purchased $3,000 of preferred stock of one of its
suppliers. The investment has been accounted for at cost in the accompanying
consolidated balance sheet.


7. DEBT:

    Short-term borrowings and long-term debt consist of the following:

                                                  SEPTEMBER 30,  DECEMBER 31,
                                                     2000           1999
                                                  -------------  ------------

      Seller notes with interest imputed at
         10%, payable in August 2001 and 2002...  $    4,003     $      --
      Seller note for working capital
         adjustment.............................       2,990            --
      Short-term borrowings.....................       1,583          4,067
      Other.....................................         133             64
                                                   ---------      ---------
                                                       8,709          4,131
      Less-- Current portion of long-term
         debt...................................      (7,457)        (4,111)
                                                  ----------     ----------
      Long term debt............................  $    1,252     $       20
                                                  ==========     ==========



    In connection with the acquisitions of Computerm and Varcom, the Company
entered into notes with the former owners of the acquired businesses. The notes
do not bear interest and mature in 2001 and 2002, respectively. The notes have
been discounted using an imputed interest rate of 10%.

    In connection with the Computerm acquisition, the former owner is due a
payment related to the working capital delivered in the closing balance sheet.
Based on the preliminary closing working capital, the amount owed to the former
owner is $2,990. The resolution of the amount due to the seller is expected to
be resolved in the fourth quarter of 2000, at which time such payment will be
made.



                                       9
<PAGE>   10
    Foreign subsidiaries have separate lines of credit with European banks in
their local currency with a U.S. value of approximately $5,200, of which $1,583
and $4,067 was outstanding at September 30, 2000 and December 31, 1999,
respectively. The revolving credit loans are classified in the accompanying
consolidated balance sheet as short-term borrowings. The weighted average
interest rate on borrowings under the foreign lines of credit was 4.93% and
5.57% for the three months and 5.63% and 6.07% for the nine months ended
September 30, 2000 and 1999, respectively. The lines of credit are guaranteed by
SPX.

8. CAPITAL STOCK:

    On June 29, 2000, a recapitalization was completed whereby the Company
authorized 20,000,000 shares of $0.01 par value preferred stock, 150,000,000
shares of $0.01 par value Class A common stock and 250,000,000 shares of $0.01
par value Class B common stock. The 1,000 outstanding shares of $0.01 par value
common stock held by SPX were converted into an aggregate of 75,633,333 shares
of Class A common stock. All references to shares outstanding have been
retroactively adjusted for this conversion.

    The terms of the preferred stock are to be established by the Board of
Directors, and any or all series of preferred stock could have preferences over
the common stock with respect to voting and conversion rights, dividends and
other distributions and upon liquidation.

    The Class A common stock and Class B common stock are identical except that
the holders of Class A common stock are entitled to five votes for each share
held while the holders of the Class B common stock are entitled to one vote for
each share held. The Class A common stock is convertible into Class B common
stock upon certain events.

    On September 27, 2000, the Company completed an initial public offering of
8,855,000 shares of Class B common stock at $16.00 per share. The Company
received net proceeds of $128,200.

9. STOCK OPTIONS:

    In June 2000, the Company established the 2000 Stock Compensation Plan (the
"Plan"). The Plan provides for the issuance of up to 11,530,000 shares of Class
B common stock for incentive stock options, nonqualified stock options, stock
appreciation rights, performance units and restricted stock to employees,
non-employee directors or consultants of the Company, SPX or any direct or
indirect subsidiary of the Company. The Plan was administered by the Board of
Directors of SPX prior to the initial public offering and, after the initial
public offering, is administered by a committee established by the Board of
Directors of the Company. Subject to the specific provisions of the Plan, the
committee determines award eligibility, timing and the type, amount and terms of
the awards.

    On June 29, 2000, the Company granted options to purchase 1,331,000 shares
of Class B common stock to directors and employees of SPX. The options were
granted at $13.00 per share and are fully vested. On September 21, 2000, the
Company granted options to purchase 7,170,500 shares of Class B common stock to
its employees at $16.00 per share. The options have a ten-year term and vest
over a six-year period.


10. EARNINGS PER SHARE:

    The Company has presented earnings per common share under SFAS No. 128,
"Earnings Per Share" and SAB No. 98. Basic earnings per share is computed by
dividing net income by the weighted average number of shares of common stock
outstanding during the period. Diluted earnings per share reflects the potential
dilution from the exercise of stock options into common stock.




                                       10
<PAGE>   11
    The following is a reconciliation of the basic and diluted earnings per
share calculations:


                                       THREE MONTHS ENDED    NINE MONTHS ENDED
                                          SEPTEMBER 30,        SEPTEMBER 30,
                                     ----------------------  -----------------
                                        2000         1999      2000      1999
                                     --------      -------   -------   -------

Net income (loss)                    $  (811)      $13,247   $ 6,882   $19,329
                                     ========      =======   =======   =======

Weighted average shares               76,018        75,633    75,763    75,633
  outstanding

Dilutive effect of stock options          --            --       165        --
                                     --------      -------   -------   -------

Diluted shares outstanding            76,018        75,633    75,928    75,633
                                     =======       =======   =======   =======

Basic earnings per share             $ (0.01)      $  0.18   $  0.09   $  0.26
                                     =======       =======   =======   =======
Diluted earnings per share           $ (0.01)      $  0.18   $  0.09   $  0.26
                                     =======       =======   =======   =======


    At September 30, 2000, there were 8,501,500 options outstanding to purchase
Class B common stock at prices ranging from $13.00 to $16.00 per share. These
stock options were not included in the earnings per share calculation for the
three months ended September 30, 2000, as the impact would be antidilutive.

11. COMPREHENSIVE INCOME:

The components of comprehensive income (loss), net of tax are as follows:

                                      THREE MONTHS ENDED   NINE MONTHS ENDED
                                        SEPTEMBER 30,        SEPTEMBER 30,
                                     -------------------   -----------------
                                      2000        1999      2000      1999
                                     ------     --------   ------   --------

Net income (loss)                     $(811)    $13,247    $6,882   $19,329

Foreign currency adjustments            318         337       701       258
                                      -----     -------    ------   -------

Comprehensive income (loss)           $(493)    $13,584    $7,583   $19,587
                                      =====     =======    ======   =======



12. GAIN ON INVESTMENT:

    In connection with the purchase of product rights, the Company obtained
warrants to purchase 750,000 shares of common stock of a publicly traded
company. The Company accounted for the investment in accordance with Statement
of Financial Accounting Standards No. 115, "Accounting for Certain Investments
in Debt and Equity Securities." The warrants were exercised in the second and
third quarter of 1999 and the common stock received upon exercise was sold
resulting in a gain of $13,914. These gains are included in other income
(expense) in the accompanying statement of operations for the three and
nine-month periods ended September 30, 1999.

13. SPECIAL CHARGES:

    The Company recorded special charges of $10,587 in 1999 for restructuring
initiatives. The components of the charges have been computed based on actual
cash payouts, management's estimate of the realizable value of the affected
tangible assets and estimated exit costs including severance and other employee
benefits based on existing severance policies. The purpose of these
restructuring initiatives was to improve profitability, streamline operations,
reduce costs and improve efficiency.

    In the first quarter of 1999, the Company announced certain restructuring
initiatives. These actions included consolidation of all general and
administrative functions into one location and reductions in sales, marketing
and engineering headcount in selected non-strategic product areas. The Company
recorded charges of $5,800 for cash severance payments to approximately 215
hourly and salaried employees, $1,765 for field sales and service office
closures (including cash holding costs of $765 and non-cash property



                                       11
<PAGE>   12
write-downs of $1,000) and $2,122 for non-cash product line discontinuance.

    Also, in the fourth quarter of 1999, the Company entered into a lease
agreement for a new facility into which operations will be further consolidated.
In connection therewith, the Company recorded a charge of $900, which covers the
remaining payments for the existing leases from the abandonment date through the
expiration of the lease.

    In June 2000, the Company reduced the restructuring charges and disposition
related accruals by $190 to reflect a revision to the expected remaining costs
to be incurred.


14. GEOGRAPHIC INFORMATION:

    SFAS No. 131, "Disclosure About Segments of an Enterprise and Related
Information," establishes additional standards for segment reporting in the
financial statements. Management has determined that all of the operations have
similar economic characteristics and may be aggregated into a single segment for
disclosure under SFAS 131. Information concerning geographic information of the
Company as prescribed by SFAS 131 is provided below.

                              THREE MONTHS ENDED        NINE MONTHS ENDED
                                 SEPTEMBER 30,            SEPTEMBER 30,
                             ---------------------    ---------------------
                                2000        1999         2000        1999
                             ---------   ---------    ---------   ---------
          Revenue:
            Domestic.......  $  36,355   $  32,119    $  96,618   $  92,815
            Foreign........     20,053      10,824       41,916      32,957
            Export.........      7,687       7,279       23,989      26,833
                             ---------   ---------    ---------   ---------
                             $  64,095   $  50,222    $ 162,523   $ 152,605
                             =========   =========    =========   =========



                             SEPTEMBER 30,  DECEMBER 31,
                                2000           1999
                             ------------   ------------
          Long-lived
          Assets:
            Domestic......    $ 94,632       $ 44,798
            Foreign.......       5,512          1,904
                              --------       --------
                              $100,144       $ 46,702
                              ========       ========


                                       12
<PAGE>   13
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

The following information should be read in conjunction with the Company's
unaudited Consolidated financial statements and related notes.

OVERVIEW

    Inrange Technologies Corporation, manufactures, markets and services
switching and networking solutions for storage, data and telecommunications
networks. Our products provide fast and reliable connections among networks of
computers and related devices and are used in large-scale systems that are
critical to the operations of Fortune 1000 businesses and other large
enterprises.

    Following the merger of SPX and General Signal Corporation and beginning in
the fourth quarter of 1998, we implemented several initiatives to rationalize
revenue, streamline operations and improve profitability. As part of this
process, we discontinued sales of non-strategic, low volume product lines and
products that were at the end of their life cycles. We also closed two
manufacturing facilities and consolidated all of our operations into one
manufacturing location, consolidated duplicative selling and administration
functions into one location, and reduced headcount in non-strategic areas. These
actions were substantially completed by July 1999. In connection with these
initiatives, we recorded special charges of $7.0 million in 1998 and $10.6
million in 1999.

     On June 30, 2000, the Company acquired two related distributor businesses
(TCS and STI) for an aggregate purchase price of approximately $6.4 million. The
Company paid $4.1 million at closing and an additional $1.6 million and $0.7
million, respectively, are payable after the first and second years from the
closing of the acquisitions based upon the achievement of certain sales targets.
Upon the achievement of such targets, the payments will be made and additional
goodwill will be recorded.

    In August 2000, the Company completed the acquisitions of Varcom Corporation
("Varcom") and Computerm Corporation ("Computerm"). Varcom is located in
Fairfax, Virginia and provides network management hardware, software, and
services. Computerm is located in Pittsburgh, Pennsylvania and offers high
performance channel extension products and services that allow storage
networking applications to operate over wide area networks. The purchase price
of Varcom was $25.0 million, which includes a non-interest bearing seller note
of $1.5 million due August 2002. As a result of the Varcom acquisition, we
recorded a $10.0 million write-off of in-process technology. The purchase price
of Computerm was $30.0 million, which includes a non-interest bearing seller
note of $3.0 million due August 2001. The Computerm acquisition contains a net
asset target of $10.7 million as of the closing date of the acquisition. A
liability of $3.0 million has been recorded in purchase accounting for the
preliminary estimate of the excess of the net assets received versus the target.
This estimated liability will be revised and settled in the fourth quarter of
2000 based on an audit of the net assets. We have accounted for all of our
acquisitions using the purchase method of accounting.




                                       13
<PAGE>   14
RESULTS OF OPERATIONS

    The following table sets forth, for the periods indicated, selected
operating data as a percentage of revenue:

<TABLE>
<CAPTION>
                                                THREE MONTHS          NINE MONTHS
                                             ENDED SEPTEMBER 30,   ENDED SEPTEMBER 30,
                                             -------------------  --------------------
                                                2000      1999       2000       1999
                                             ---------  --------  ---------   --------
<S>                                          <C>        <C>       <C>         <C>
Revenue.....................................   100.0%   100.0%      100.0%    100.0%
Gross margin................................    50.4%    56.4%       49.4%     50.1%
Research, development and engineering.......     9.1%     7.6%        9.8%      9.5%
Selling, general and administrative.........    25.2%    21.1%       25.0%     22.8%
Operating income (loss).....................    (0.6%)   32.8%        7.8%     12.8%
Net income (loss)...........................    (1.3%)   26.4%        4.2%     12.7%
</TABLE>


Comparison of three months ended September 30, 2000 and 1999

    Revenue. Revenue for the three months ended September 30, 2000 was $64.1
million, an increase of $13.9 million, or 27.6%, from $50.2 million for the
three months ended September 30, 1999. Excluding the negative impact of foreign
currency translations in Europe, revenue increased to approximately $66.6
million, an increase of $16.4 million or 32.6%.

    Sales of our open storage networking products were $14.1 million, an
increase of $8.4 million, or 147.4%, from $5.7 million in the three-month period
ended September 30, 1999. Our open storage networking products consist of fibre
channel directors and optical networking equipment. The increase was primarily
driven by sales of the FC/9000 Director, which was released for general
availability during the quarter. Sales from other storage networking products
increased by $5.1 million and was mainly attributable to increased channel
extension sales as a result of the Computerm acquisition.

    Cost of Revenue. Our cost of revenue for the three months ended September
30, 2000 was $31.8 million, an increase of $9.9 million, or 45.2%, from $21.9
million for the three months ended September 30, 1999. As a percentage of
revenue, cost of revenue increased to 49.6% for the three months ended September
30, 2000 from 43.6% for the three months ended September 30, 1999. The increase
in cost of revenue was related to increased sales, higher services costs, a
change in mix of products and increased reserve requirements for excess and
obsolete inventory. The increase in service cost of $2.1 million was a result of
increased service headcount to support the introduction of the FC/9000 and from
the acquisitions.

    Research, Development and Engineering. Research, development and engineering
expenses for the three months ended September 30, 2000 were $5.8 million, an
increase of $2.0 million from $3.8 million for the three months ended September
30, 1999. As a percentage of revenue, research, development and engineering
expenses were 9.1% for the three months ended September 30, 2000 as compared to
7.6% for the three months ended September 30, 1999. The increase was a result of
additional headcount primarily to support Fibre Channel initiatives, and other
storage networking products, as well as new datacom and telecom programs. The
additional headcount for the data networking and telecom networking programs was
principally from the acquisitions. Including capitalized software, research
development and engineering spending was $7.6 million for the three months ended
September 30, 2000, or 11.8% of revenue, compared to $4.7 million, or 9.4% of
revenue, for the three months ended September 30, 1999. We expect that total
research, development and




                                       14
<PAGE>   15
engineering expenses will continue to increase in the future as we develop and
enhance new and existing products.

    Selling, General and Administrative. Selling, general and administrative
expenses for the three months ended September 30, 2000 were $16.1 million, an
increase of $5.5 million from $10.6 million for the three months ended September
30, 1999. As a percentage of revenue, selling, general and administrative
expenses were 25.2% for the three months ended September 30, 2000, compared to
21.1% for the three months ended September 30, 1999. Selling and administrative
personnel and related costs of $2.0 million from the acquired businesses are
included in the September 2000 amounts. The remainder of the increase was
primarily due to increased personnel to support the expected sales levels for
the FC/9000, spending related to additional marketing and e-commerce initiatives
and hiring additional key management.

     Amortization of Goodwill and Other Intangibles. Amortization of goodwill
and other intangibles for the three-month periods ended September 30, 2000 and
1999 was $0.7 million and $0.3 million, respectively. The increase was a result
of goodwill and other intangibles associated with the three acquisitions
recently completed.

    Write-off of Acquired in-Process Technology. In conjunction with the
acquisition of Varcom, we recorded a charge of $10.0 million for the write-off
of acquired in-process technology.

     Gain on Sale of Real Estate. In the three-month period ended September 30,
1999, we sold one of our facilities for $6.4 million and recognized a gain on
sale of real estate of $2.8 million. We did not sell any real estate in 2000.

    Interest Expense. Interest expense for the three months ended September 30,
2000 was $0.8 million, compared to $0.2 million for the three months ended
September 30, 1999. The interest expense for the three months ended September
30, 2000 was principally for money loaned to us by SPX for the acquisitions of
Varcom, Computerm and TCS / STI. The loan for these acquisitions has been repaid
from the IPO proceeds.

    Other Income (Expense). Other expense for the three months ended September
30, 2000 was $0.1 million, compared to $6.2 million of income for the three
months ended September 30, 1999. This decrease resulted primarily from a gain on
the sale of an investment in the three month period ended September 30, 1999.

  Income Taxes. Our effective tax rate for the three months ended
September 30, 2000 was 40%, compared to 40.9% for the same period in 1999.


Comparison of nine months ended September 30, 2000 and 1999

    Revenue. Revenue for the nine months ended September 30, 2000 was $162.5
million, an increase of $9.9 million, or 6.5%, from $152.6 million for the nine
months ended September 30, 1999. Excluding the negative impact of foreign
currency translations in Europe, revenue increased to $167.0 million, an
increase of $14.4 million or 9.4%.

    Sales of our open storage networking products were $30.6 million, an
increase of $18.1 million, or 144.8%, from $12.5 million for the nine months
ended September 30, 1999. The increase was primarily the result of



                                       15
<PAGE>   16
sales of the FC/9000 director. The increase was offset by lower sales of our
data networking products, which decreased $7.1 million and our
telecommunications monitoring products, which decreased $3.7 million. The
reduction in sales of the telecommunications monitoring products resulted from
reduced sales to a single customer.

    The Company believes that the decrease in sales of data networking product
line is a result of a maturing market. To expand the applications and market for
this product, the Company is repositioning its core technology into the area of
physical network management with its newly announced Universal Touchpoint
Architecture that began shipping in the first quarter of 2000.

    Cost of Revenue. Cost of revenue for the nine months ended September 30,
2000 was $82.2 million, an increase of $6.1 million, or 8.0%, from $76.1 million
for the same period in 1999. As a percentage of revenue, cost of revenue
increased to 50.6% for the nine months ended September 30, 2000 from 49.9% for
the nine months ended September 30, 1999. The increase in cost was primarily
attributable to higher sales, increased service costs to support the FC/9000
introduction and a change in the mix of products sold.

    Research, Development and Engineering. Research, development and engineering
expenses for the nine months ended September 30, 2000 were $15.9 million, an
increase of $1.4 million, or 9.9%, from $14.4 million for the nine months ended
September 30, 1999. As a percentage of revenue, research, development and
engineering expenses were 9.8% for the nine months ended September 30, 2000 as
compared to 9.5% for the nine months ended September 30, 1999. The increase was
a result of additional personnel to support new initiatives and from headcount
arising from the acquisitions. Including capitalized software, research
development and engineering spending was $20.6 million for the nine months ended
September 30, 2000, or 12.7% of revenue, compared to $18.2 million, or 11.9% of
revenue, for the nine months ended September 30, 1999.

    Selling, General and Administrative. Selling, general and administrative
expenses for the nine months ended September 30, 2000 were $40.7 million, an
increase of $5.8 million from $34.8 million for the nine months ended September
30, 1999. As a percentage of revenue, selling, general and administrative
expenses were 25.0% for the nine months ended September 30, 2000, compared to
22.8% for the nine months ended September 30, 1999. The increase resulted from
acquisitions, the hiring of additional personnel to support the expected sales
levels for the FC/9000, spending related to our e-commerce initiatives and
hiring additional key management personnel.

    Amortization of Goodwill and Other Intangibles. Amortization of goodwill and
other intangibles for the nine-month periods ended September 30, 2000 and 1999
was $1.3 million and $0.8 million, respectively. The increase was a result of
goodwill associated with the three recent acquisitions.

    Write-off of Acquired in-Process Technology. In conjunction with the
acquisition of Varcom, we recorded a charge of $10.0 million for the write-off
of acquired in-process technology.

    Special Charges. Special charges for the nine months ended September 30,
2000 were ($0.2) million, compared to $9.7 million for the nine months ended
September 30, 1999. The 1999 restructuring initiatives included the
consolidation of all general and administrative functions into one location and
reductions in sales, marketing and engineering headcount in selected
non-strategic product areas. The Company recorded charges of



                                       16
<PAGE>   17
$5.8 million for severance payments, $1.8 million for field sales and service
office closures and $2.1 million for product line discontinuance.

    The Company has revised the estimates of the remaining costs expected to be
incurred in our restructuring, resulting in special charges of ($0.2) million in
the nine months ended September 30, 2000. As of September 30, 2000, we
maintained $1.2 million of restructuring charges and disposition related
accruals. These accruals include $0.3 million for facility holding costs, which
are expected to used by May 2002, and $0.9 million for the remaining lease
obligations on our existing manufacturing facility, which will be used through
February 2002.

    Interest Expense. Interest expense for the nine months ended September 30,
2000 was $1.1 million, compared to $0.7 million for the nine months ended
September 30, 1999. The increase was due to interest on a loan from SPX to fund
the recently completed acquisitions, offset by a decrease in interest paid on
foreign borrowings.

    Other Income (Expense). Other income decreased in 2000 primarily due to
a gain on the sale of an investment in 1999.

    Income Taxes. Our effective tax rate for the nine months ended September 30,
2000 was 40%, compared to 40.9% for the nine months ended September 30, 1999.



LIQUIDITY AND CAPITAL RESOURCES

    Cash flow from operating activities was $11.4 million for the nine months
ended September 30, 2000. During this period, cash flow from operations was
principally generated from net income and increases in accounts payable and
accrued expenses, offset by increases in accounts receivable, inventories and
prepaid expenses.

    Cash flow used for investing activities was $73.2 million for the nine
months ended September 30, 2000. Of that amount, $54.8 million related to the
cash payments for acquired businesses, $3.0 million represented an equity
investment in a private company and the remainder was used for additions of
property and equipment, capitalized software and other assets.

    In September 2000, we completed an initial public offering of 8,855,000
shares of Class B Common stock at $16.00 per share and received net proceeds of
$128.2 million. The proceeds were used to repay certain borrowings from SPX to
fund certain acquisitions made in the second and third quarters of 2000. The
remaining proceeds will be used for general corporate purposes. Pending use, the
Company invested $15 million in a money market account and the remaining net
proceeds have been loaned to SPX under a demand note. From time to time, the
Company has supplemented its operating cash flows with capital contributions
from SPX, borrowings under foreign lines of credit and capital leases.

    For the nine months ended September 30, 2000, net cash generated by
financing activities was $80.2 million, primarily consisting of net cash inflows
from the initial public offering and borrowings from SPX partially offset by the
repayment of debt and the payment of the note due to SPX for the acquisitions.
We have borrowed



                                       17
<PAGE>   18
funds for the working capital and business expansion needs of our foreign
operations from local financial institutions. At September 30, 2000, our credit
facilities consisted of $5.2 million in lines of credit in the United Kingdom,
Germany and Italy that were guaranteed by SPX. At September 30, 2000,
approximately $1.6 million was outstanding under these facilities. The weighted
average interest rate on borrowings under the foreign lines of credit was 5.63%
for the nine months ended September 30, 2000. These borrowings are reflected on
the balance sheets as short-term borrowings.

    As part of our cash management system, we lend, on a daily basis, our cash
and cash equivalents in excess of $15 million to SPX. We lend these amounts to
SPX under a loan agreement that allows us to demand repayment of outstanding
amounts at any time. However, even after SPX repays us the amount due under the
loan agreement, as part of our cash management system we will continue to be
obligated to lend, on a daily basis, all of our cash and cash equivalents in
excess of $15 million to SPX until the termination of the loan agreement. The
loan agreement will terminate when SPX owns less than 50% of our outstanding
shares of Class A common stock and Class B common stock or if there is an event
of default under SPX's credit agreement. Amounts loaned under the loan agreement
are unsecured. Loans made prior to October 1, 2000, accrued interest quarterly
at a rate of 8 1/2% and, for loans made on or after October 1, 2000, interest
accrues quarterly at the weighted average rate of interest paid by SPX for
revolving loans under its credit agreement for the prior quarter. SPX's ability
to repay these borrowings is subject to SPX's financial condition and liquidity,
including its ability to borrow under its credit agreement or otherwise.

    We believe that the net proceeds from the initial public offering, together
with current cash balances, foreign credit facilities and cash provided by
future operations, will be sufficient to meet the working capital, capital
expenditure and research and development requirements for the foreseeable
future. However, if additional funds are required to support our working capital
requirements or for other purposes, the Company may seek to raise such
additional funds through borrowings from SPX, public or private equity
financings or from other sources. The Company's ability to issue equity may be
limited by SPX's desire to preserve its ability in the future to effect a
tax-free spin-off and by limitations under SPX's credit agreement. In addition,
the Company's ability to borrow money may be limited by restrictions under SPX's
credit agreement. Additional financing may not be available, or, if it is
available, it may be dilutive or may not be obtainable on terms acceptable to
us.

RECENT ACCOUNTING PRONOUNCEMENTS

    In 1999, the Securities and Exchange Commission's staff issued SAB No. 101,
"Revenue Recognition in Financial Statements." SAB No. 101 provides guidance on
revenue recognition and management is evaluating the impact of the statement on
the financial position and results of operations. Management is currently
analyzing the impact of this statement, but does not anticipate that the effect
on results of operations and financial position will be material.

    SFAS No. 133, "Accounting for Derivative Instruments and Hedging
Activities," which will become effective January 2001, establishes accounting
and reporting standards for derivative instruments and hedging contracts. It
also requires that all derivatives are recognized as either assets or
liabilities in the balance sheet at fair value and changes in fair value are
recognized in operating results. Management is currently analyzing the impact of
this statement, but does not anticipate that the effect on results of operations
and financial position will be material.




                                       18
<PAGE>   19
                              --------------------

The foregoing discussion in "Management's Discussion and Analysis of Financial
Condition and Results of Operations" contains forward looking statements, within
the meaning of Section 21E of the Securities exchange Act of 1934, as amended,
that are subject to the safe harbor created thereby. This forward looking
statements, which reflect management's current views with respect to future
events and financial performance, are subject to certain risks and
uncertainties, including but not limited to those matters discussed above. Due
to such uncertainties and risks, readers are cautioned not to place undue
reliance on such forward looking statements, which speak only as of the date
hereof. Reference is made to the Company's Form S-1 Registration Statement for
additional cautionary statements and discussion of certain important factors as
they relate to forward looking statements. In addition, management's estimates
of future operating results are based on the current business, which is
constantly subject to change as management implements its strategy.




                                       19
<PAGE>   20
ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate Risk. The Company's exposure to market risk for changes in
interest rates relates primarily to the Company's investment portfolio. The
Company does not use derivative financial instruments in its investment
portfolio. The Company places its cash and cash equivalents with high credit
quality issuers. The Company mitigates default risk by investing in only the
safest and highest credit quality securities and by positioning its portfolio to
respond appropriately to a significant reduction in a credit rating of any
investment issuer, guarantor or depository. The portfolio includes only
marketable securities with active secondary or resale markets to ensure
portfolio liquidity.

In addition the Company utilizes a cash management program administered by SPX
and has a demand note receivable from SPX. Interest accrues quarterly on this
loan to SPX at 8 1/2% through October 1, 2000. After October 1, 2000, interest
on the loan will be adjusted quarterly and will accrue at the weighted average
rate of interest paid by SPX for revolving loans under its credit agreement for
the prior quarter. The loan to SPX is unsecured and SPX's ability to repay the
amount due will be subject to SPX's financial condition and liquidity, including
its ability to borrow under its credit agreement or otherwise.

The Company is exposed to foreign currency fluctuation relating to its foreign
subsidiaries. The Company does not maintain any derivative financial instruments
or hedges to mitigate such fluctuation.




                                       20
<PAGE>   21
PART II.   OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

From time to time, the Company is involved in litigation relating to claims
arising out of its operations in the normal course of its business. We are not a
party to any pending legal proceedings that we believe will materially impact
the Company's financial condition, liquidity or results of operations.

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS


On September 21, 2000, the Company, in its initial public offering, sold
7,700,000 shares of its Class B common stock at a price of $16.00 per share. The
shares were sold pursuant to a Form S-1 Registration Statement (Registration No.
333-38592) that was declared effective by the Securities and Exchange Commission
on September 21, 2000. Salomon Smith Barney, Bear, Stearns & Co., Inc. and Chase
H & Q were the managing underwriters of the offering. The underwriters
subsequently exercised their option to purchase 1,155,000 additional shares of
the Company's Class B common stock at $16.00 per share and closed on the
purchase of all 8,855,000 shares on September 27, 2000. The gross proceeds from
the offering were $ 141.7 million and the aggregate net proceeds to the Company
from the offering were approximately $131.8 million after deducting
approximately $9.9 million in underwriting discounts and commissions paid to the
underwriters. In addition to underwriting discounts and commissions, we have
estimated that we will pay approximately $2.1 million in expenses associated
with the offering, including registration fees, costs of printing and engraving,
and legal and accounting costs.

Since completing the initial public offering on September 27, 2000, the Company
used $55.7 million of the net proceeds to repay the principal and interest due
on each of three loans made to the Company by its parent, SPX, in funding the
Company's acquisitions of TCS and STI, two European systems integration
businesses, Varcom, a provider of advanced network monitoring and management
tools, and Computerm, a provider of storage area network channel extension
products. The Company, in connection with these acquisitions, had borrowed $54.9
million from SPX at the prime rate plus one-half percent.

The remaining $74.0 million of the proceeds will be used for general corporate
purposes. Pending this use, the Company invested $15.0 million of the proceeds
in investment grade securities and loaned the remaining $59.0 million to SPX,
under a demand note, for use in the daily cash management program administered
by SPX. At September 30, 2000, the balance due from SPX under the demand note
was $57.5 million. Interest accrues quarterly on this note at 8 1/2% through
October 1, 2000. After October 1, 2000, interest on the loan will be adjusted
quarterly and will accrue at the weighted average rate of interest paid by SPX
for revolving loans under its credit agreement for the prior quarter. The loan
to SPX is unsecured and SPX's ability to repay the amount due will be subject to
SPX's financial condition and liquidity, including its ability to borrow under
its credit agreement or otherwise. The loan agreement will terminate when SPX
owns less than 50% of our outstanding shares of Class A common stock and Class B
common stock or if there is an event of default under SPX's credit agreement.



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<PAGE>   22
Except as described herein, none of the net proceeds of the offering or the
offering expenses paid by the Company were paid, directly or indirectly, to any
director or officer of the Company or their associates, to persons owning ten
percent or more of any class of the Company's securities or to any affiliates of
the Company.





                                       22
<PAGE>   23
ITEM 5. OTHER INFORMATION

<TABLE>
<CAPTION>

(a)  EXHIBITS:

<S>        <C>

   *3.2  -  Amended and Restated By-Laws of Inrange Technologies Corporation
            (Exhibit 3.2 to the Form S-1 Registration Statement (No. 333-38592)).

   *3.3  -  Amended and Restated Certificate of Incorporation of Inrange
            Technologies Corporation (Exhibit 3.2 to the Form S-1 Registration
            Statement (No. 333-38592)).

   *4.1  -  Form of Inrange Technologies Corporation Class B common stock
            certificate (Exhibit 3.2 to the Form S-1 Registration Statement
            (No. 333-38592)).

  *10.1  -  Tax Sharing Agreement, between Inrange Technologies Corporation and
            SPX Corporation (Exhibit 10.1 to the Form S-1 Registration
            Statement (No. 333-38592)).

  *10.2  -  Management Services Agreement, between Inrange Technologies
            Corporation and SPX Corporation (Exhibit 10.2 to the Form S-1
            Registration Statement (No. 333-38592)).

  *10.3  -  Registration Rights Agreement, between Inrange Technologies
            Corporation and SPX Corporation (Exhibit 10.3 to the Form S-1
            Registration Statement (No. 333-38592)).

  *10.4  -  Trademark License Agreement between Inrange Technologies Corporation
            and SPX Corporation (Exhibit 10.4 to the Form S-1 Registration
            Statement (No. 333-38592)).

  *10.5  -  Reseller Agreement, dated October 29, 1999 between Inrange
            Technologies Corporation and Ancor Communications, Inc. (Exhibit
            10.5 to the Form S-1 Registration Statement (No. 333-38592)). ++

  *10.6  -  Technology License Agreement dated September 24, 1998 between Inrange
            Technologies Corporation and Ancor Communications Inc. (Exhibit 10.6
            to the Form S-1 Registration Statement (No. 333-38592)). ++

</TABLE>


                                       23
<PAGE>   24
<TABLE>
<S>          <C>
  *10.7   -  Letter Agreement dated November 23, 1999 between Inrange Technologies
             Corporation and Ancor Communications Inc. (Exhibit 10.7 to the Form S-1
             Registration Statement (No. 333-38592)). ++

  *10.8   -  Loan Agreement, between Inrange Technologies Corporation and SPX
             Corporation (Exhibit 10.9 to the Form S-1 Registration Statement
             (No. 333-38592)).

  *10.9   -  Employee Matters Agreement, between Inrange Technologies Corporation
             and SPX Corporation (Exhibit 10.10 to the Form S-1 Registration
             Statement (No. 333-38592)).

  *10.10  -  Inrange Technologies Corporation 2000 Stock Compensation Plan
             (Exhibit 10.8 to the Form S-1 Registration Statement (No. 333-38592)).

  *10.11  -  Inrange Technologies Corporation Employee Stock Purchase Plan
             (previously filed as Exhibit 4.3 to the Company's Registration
             Statement (No. 333-46402) on Form S-8).

   10.12  -  Inrange Technologies Corporation Executive EVA Incentive Compensation Plan.

   27     -  Financial Data Schedule
</TABLE>

*  Incorporated by reference, as indicated.

++ Portions of these exhibits have been omitted pursuant to the Commission's
grant of a request for confidential treatment

(b)  REPORTS ON FORM 8-K

     Not applicable.





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<PAGE>   25
                                   SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.


                                    INRANGE TECHNOLOGIES CORPORATION

Date: November 9, 2000              By:      /s/ JAY ZAGER
                                             ----------------------------------
                                             Jay Zager Executive Vice President
                                             and Chief Financial Officer (duly
                                             authorized officer and principal
                                             financial officer)




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